Future FinTech Acquires Sichuan Ticode Supply Chain Management for $ 66.45 million

Blockchain e-commerce company Future FinTech Group Inc. (NASDAQ: FTFT) announced that on April 16, 2021, the Company closed its acquisition of a 60% equity interest in Sichuan Ticode Supply Chain Management Co., Ltd. from Sichuan Longma Electronic Technology Co., Ltd..

As the Company announced in its press release on March 1, 2021, the Company and its wholly-owned subsidiary, Future Supply Chain Co., Ltd., entered into a definitive share exchange agreement with Longma and Ticode to acquire a 60% equity interest in Ticode from Longma.

The 60% equity interest in Ticode was valued at about $66.45 million, paid for 7,789,882 shares of FTFT common stock priced at $8.53 per share.

The Agreement also stipulates that an additional 5% of equity interest in Ticode shall be transferred to the Company at no cost should Ticode not achieve Earnings Before Interest and Taxes (“EBIT”) of at least RMB 50.0 million (approximately $7.69 million) for the fiscal year ended December 31, 2021, and an additional 5% equity interest in Ticode shall be transferred to the Company at no cost should Ticode not achieve EBIT of at least RMB 57.5 million (approximately $8.85 million) for the fiscal year ended December 31, 2022.

Ticode offers the supply chain industry financial services and accomplished revenue of $518.61 million (RMB 3.36 billion) and net profit of $ 7.41 million (RMB 47.99 million) in FY19.

Ticode’s business includes procurement agent services, sales agent services, inventory pledged loan services, and supply chain financing intermediary services. Ticode’s supply chain-related services include electronic components, technology services to supply chain data management for the electronics industry, and supply chain management.

It's important to note that growth by acquisition appears to be the ongoing strategy for Future FinTech. In just the past month, it's announced three other acquisitions ranging from a fintech company to an asset management operation.

It's also important to note that Future FinTech's business doesn't provide it with much money, so it's relied on stock offerings to fund these acquisitions. The company closed on a $35 million direct offering earlier this month.

Author Bio

Xiaoyu Ma, mainly writes about bitcoin-mining companies based in China. He used to be a senior editor of NetEase Finance, a famous financial media in China.